SAN JOSE, Calif. -- The boom-to-bust cycle in the semiconductor industry appears to be getting shorter, leaving some to wonder about which companies can ultimately survive the roller-coaster ride.
After the downturn in 2001 and 2002--with probable modest growth for 2003--the IC industry is expected to enjoy a swift upturn in 2004, followed by another downturn in 2005, according to a new forecast from IC Insights Inc.
Bill McClean, president of the Scottsdale, Ariz.-based research firm, projects that the IC industry will grow 23 percent in 2004 over 2003, but will then decline 8 percent in 2005. In 2005, the market will suffer from an excess capacity of 300-mm fabs in the industry, McClean told SBN.
Last year, IC Insights projected that the worldwide semiconductor market would grow 15 percent in 2003 over 2002. The firm recently revised its forecast and said the market will reach $136.4 billion in terms of sales in 2003, a 13 percent growth rate over 2002.
IC units are expected to grow 15 percent in 2003 over 2002, according to the report. This is an increase of 4 percentage points from IC Insights' previous 2003 IC unit volume forecast of 11 percent growth see July 7 story ). "The unit volumes keep churning away," McClean said.
IC Insights' numbers differ from other projections. In June, the Semiconductor Industry Association (SIA) lowered its chip forecasts for 2003 and 2004, but was slightly more upbeat than previously expected for 2005 and 2006.
The San Jose-based trade group projected worldwide semiconductor sales would increase 10.1 percent to $154.9 billion in 2003, 16.8 percent to $180.9 billion in 2004, 5.8 percent to $191.5 billion in 2005, and 7 percent to $204.9 billion in 2006 June 11 story ).
Still, with a possible downturn looming, analysts wonder which companies will survive over the long term. The current and severe downturn has already changed the landscape in both the semiconductor and chip-equipment industries.